January 13th, 2009 by Michael Oliver

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For the regular readers of this blog no one will be surprised but Tucson’s high end luxury market is facing some tough times. Across the board home sales are down however in the $1 million plus end of the spectrum home sales are in dire straits. Saguaro Ranch nestled in the Tortolita Foothills north of Moore and Tangerine roads in Marana has entered into a state of default on its real estate loan. Saguaro Ranch is a true gem of Tucson’s high end neighborhoods. Few Tucson neighborhoods can compete with the vision, layout, views, and prestige that Saguaro Ranch was supposed to bring to the Tucson luxury marketplace. (Maybe the only high end neighborhood that could truly compete was the highest of the high named Cobblestone. The Cobblestone community starts essentially at the northern tip of Campbell Avenue and stretches along the Catalina foothills.) Saguaro Ranch is a huge development that was the brainchild of Stephen Phinny (grandson of Daniel F. Gerber, founder of Gerber Products Co.) Saguaro Ranch was developed to be the best high end real estate development in Arizona. Famed for its 676 foot long tunnel blasted through a mountain allows residents entrance into the neighborhood. Court records show that Saguaro Ranch has just fallen behind on a $50 million development loan from Kennedy Funding in New Jersey.

Saguaro Ranch covers 1,035 pristine acres in the Tortolita Mountains, plans called for 180 home sites to be developed. Home sites start at $1.25 million and homes were planned to average $3.5 million in price. A couple homes have been completed and some people do call Saguaro ranch home. Phinny Saguaro Ranch’s developer sites the major downturn in luxury real estate as the prime cause that his development has fallen into the initial stages of foreclosure. Luxury home buyers in Tucson that want to be in Northwest Tucson have a lot of options when purchasing: Dove Mountain, The New Residences At Ritz-Carlton, and Stone Canyon neighborhoods all compete for the same buyers in this multi-million dollar home segment. This caused additional pressures on Saguaro Ranch to be able to sell not only in a tough economic storm but also against some very serious, committed, and well capitalized competition.

My guess is that overtime regardless of what happens in the near future for Phinny and Saguaro Ranch, the area is prime for luxury homes and has a very exclusive buyer profile already. Currently the economic storm has taken the wind out of all real estate developers sails and in time this will pass. In 10 to 20 years my guess is Saguaro Ranch will be a full fledged luxury neighborhood. The development may have to be foreclosed upon, and at some point a new developer may have to tweak the development plan and experience however over the long term this area is truly pristine and very alluring to those that would like to own their own prime piece of high end luxury Tucson real estate. This just goes to show that the serious and sharp real estate (now across the economy not “just” real estate related) is hurting all developments, neighborhoods, and individuals regardless of area or price range it affects everyone. I believe that in Tucson’s high end real estate market the pain is just beginning as more high end listings come on the market and demand has seriously curtailed itself since the very volatile October 2008 sessions the stock markets had. I personally do not see high end ($1 Million plus) real estate in Tucson coming back in a balanced state until the economic storm has long left the US and who knows how long this will take.